Fitch revises TalkTalk view to stable

Fitch Ratings said it revised the outlook on TalkTalk Telecom Group plc's long-term issuer default rating to stable from negative and affirmed the IDR at BB-.

“The prospective sale of FibreNation and the near completion of TalkTalk's cost reduction plan should enable the company to bring funds from operation (FFO) adjusted net leverage to below 3.8x and within the thresholds for the company's rating. Combined with improving leverage headroom over the next two to three years, this has driven the revision of the outlook to stable,” said Fitch in a press release.

Fitch said it expects TalkTalk to use the majority of the proceeds from the sale to reduce debt. Fitch consequently expects TalkTalk's FFO adjusted net leverage to decrease to about 3.6x in fiscal year 2020 and fiscal year 2021 (financial year ending in March) from 4.4x in FY19 and below the downgrade thresholds of the rating.

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